Some former tenants in San Francisco could almost pay for a home in Las Vegas with their apartment buyout windfall.
Two San Francisco tenants were paid $410,000 to leave their Pacific Heights apartment in August, in the highest buyout agreement this year, the San Francisco Chronicle reported.
The median sale price in August for a Las Vegas home was $416,000, according to Redfin.
The mega-buyout came during a record year for buyout agreements in San Francisco.
From January through August, property owners have paid out $13.6 million to San Francisco tenants in buyout agreements. The last year buyouts were close was 2018, which had $12.9 million in buyouts through August.
The buyouts were mostly concentrated in the city’s center, in neighborhoods such as Castro/Upper Market, Haight Ashbury and Hayes Valley, with median incomes of more than $135,000.
The buyout agreements mean a tenant is paid money by a landlord to leave a rental unit. To strengthen eviction protections, the city started regulating buyout agreements in 2015.
Buyout totals reached an all-time high this year, mostly because of a rise in the average amount of each buyout, rather than a bump in the total number of buyouts. There were more buyouts from January through August last year, at 265, than 250 during the same period this year.
The city’s biggest single tenant buyout was in May 2021, when two tenants at 145 Laurel Street were paid $475,000 to vacate their Presidio Heights apartment.
The tenants, a couple in their 60s who had lived in the apartment for 30 years, were the typical target for large buyouts — longtime renters in expensive neighborhoods with below market rents.
This year, the $410,000 buyout was paid to tenants at 2157 Jackson Street in Pacific Heights, according to the Chronicle, which cited Data SF. A slew of $300,000 buyouts occurred in South of Market and Pacific Heights.
Reasons for the buyouts are mixed.
The last several years saw more people moving out of San Francisco. And more people willing to leave means more tenants willing to take buyouts, Scott Weaver, an attorney for Eviction Defense Collaborative, told the newspaper. Pandemic-era eviction moratoriums limited eviction options for landlords and incentivized buyouts
Also, landlords could be reacting to current rental rates bouncing back after taking a plunge during the first year of the pandemic, SPUR housing policy researcher Sarah Karlinsky said.
“Landlords may be incentivized to buy out tenants in order to fill units with new tenants at current market-rate rents,” Karlinsky said.
— Dana Bartholomew
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